Regulation Crypto Assets would let projects raise up to $5 million over four years, or up to $75 million a year, without full registration. Crypto firms broadly support the proposal but want changes on airdrops, disclosure and how freely tokens sold under it can trade.
The crypto industry spent the last day of the comment period telling the Securities and Exchange Commission that it likes the idea. Most of the letters are about the details.
The public comment period on Regulation Crypto Assets, the SEC's proposed framework for token fundraising, closed on Tuesday, Oct. 20. The commission proposed the rule on Aug. 18.
The proposal would create two exemptions from Securities Act registration for certain investment contracts involving crypto assets. A one-time startup exemption would allow a project to raise up to $5 million over four years. A fundraising exemption would allow up to $75 million in any 12-month period, conditioned on financial statements and ongoing reporting. Disclosure would be principles-based, and antifraud rules would still apply.
Yes, but
More than 100 submissions arrived. The pattern among the largest participants was support with conditions.
Ripple backed the rule and called for an end to case-by-case enforcement while seeking changes. Bitwise pressed for a public-information standard for tokens that trade after an offering. The Hyperliquid Policy Center asked the SEC to state that airdropped tokens given away for nothing are not securities. Chainlink Labs, Hedera, Aptos Labs, Ava Labs, the Stellar Development Foundation and the Cardano Foundation filed a joint letter asking the agency to write criteria for digital commodities into the rule text.
Financial-industry groups focused on investor protection. The Alternative Investment Management Association asked that issuers distinguish economic exposure from ownership and contractual rights. The securities industry trade group SIFMA weighed in on a separate matter, saying investor-protection questions in the SEC's five-year innovation exemption must be settled at the outset.
The law firm Davis Polk, in its own letter, asked the agency to provide an objective secondary-market safe harbor from the outset and to replace the "essential managerial efforts" element drawn from the Howey test, the legal standard for what counts as an investment contract, with an objective, disclosure-based standard. The Institute for Portfolio Alternatives filed separately, backing the rule's preemption of state registration requirements.
Why secondary trading matters most
Of all the requests, the push on secondary trading has the most direct effect on investors. A fundraising exemption governs how a project sells tokens. A trading safe harbor governs whether those tokens can then change hands freely on U.S. platforms. The proposal already includes a conditional safe harbor for certain secondary transactions; the question raised in the letters is whether to broaden it or replace it with an objective test available from day one. A narrow version could leave tokens raised under the rule harder to trade, which would limit what U.S. exchanges such as Coinbase and Robinhood can list.
The breadth of support also says something. When the debate is over airdrops, disclosure formats and trading conditions rather than whether the regime should exist, the remaining risk is less about the framework being abandoned and more about its final shape and timing.
Market implications
One reading is that a workable offering regime will bring token issuance back onshore and expand what U.S. venues can list.
A second reading is that the caps are too low. Limits of $5 million and $75 million, plus reporting costs, may keep the largest projects offshore.
A third reading is that the framework is exposed to politics. A future commission could narrow or reverse it.
What to watch
Whether the SEC broadens or replaces the conditional secondary-trading safe harbor in the final text; any statement on the timing of a final vote; the treatment of airdrops; and how exchanges plan for listings under the exemptions. A final rule with an objective trading safe harbor available from the outset would be the clearest signal that tokens raised under it can reach U.S. retail platforms.